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Credit: The Point of View on Channel One TV
The Director of Research at the Institute of Economic Affairs (IEA), Prof. Alexander Bilson Darku, has challenged claims that the Ghana Gold Board (GoldBod) incurred a US$1.7 billion loss under the Domestic Gold Purchase Programme (DGPP) in 2025.
His comments come amid growing debate over a reported US$1.7 billion loss associated with the programme, which was recorded by the Bank of Ghana (BoG).
Speaking to Jude Duncan on Channel One TV’s The Point of View on Wednesday, September 2, Prof. Darku said the International Monetary Fund (IMF) report cited in the debate did not state that GoldBod incurred the loss.
He explained that the reported loss was recorded on the books of the central bank and argued that discussions should therefore focus on why the Bank of Ghana incurred the loss.
“I really don’t understand why we still talk about this issue this way, in the sense that the IMF report that you made reference to does not say that GoldBod made a loss,” he said.
“It says the central bank is making a loss. It says that it sits on the central bank books. Very clear in that. So from where is the debate that GoldBod made a loss?” he added.
GoldBod acted as BoG’s agent
Prof. Darku said GoldBod’s role under the programme was primarily that of an agent for the Bank of Ghana, purchasing gold on behalf of the central bank before the gold was exported.
“The second way of looking at it is, we’re forgetting that GoldBod was an agent, an agent that bought gold for the central bank, on behalf and for the central bank. The central bank that got it exported it,” he said.
He noted that the IEA had previously explained the accounting treatment of the losses, although some had argued that the cost should instead have been captured by government through the national budget because the programme was quasi-fiscal.
“Many people argue that it should not have sat there; it should rather be absorbed by government in its budget, because it is quasi-fiscal,” he said.
According to Prof. Darku, however, the debate over where the cost should have been recorded does not change the fact that the reported loss appears on the Bank of Ghana’s books.
“So if we are discussing, we should discuss whether, why did the central bank make that loss or not,” he stated.
Forex valuation accounts for major part of loss
The IEA Research Director further explained that the reported loss was made up of various components, including fees and discounts paid by the Bank of Ghana to GoldBod.
“We even went ahead to show you the component of that loss, that it is the fees, the discounts, and all those things, that the central bank paid GoldBod,” he said.
He argued that such payments could represent revenue to GoldBod rather than losses incurred by the institution.
“If that is the case, then actually those are revenues to GoldBod, and can be a loss to GoldBod,” he said.
Prof. Darku identified foreign exchange valuation as the largest component of the reported loss.
He explained that when proceeds from gold exports are received in US dollars, the Bank of Ghana converts and records the inflows in cedis using its official exchange rate. According to him, that rate differed from the rate at which GoldBod purchased the gold on behalf of the central bank.
“And the major part of that loss is the foreign exchange valuation,” he said.
He stressed that the exchange-rate treatment was not a decision taken independently by GoldBod, but rather resulted from policy and accounting decisions involving the government and the central bank.
“I do not think it was the decision of GoldBod to buy the gold at the forex rate. It is a decision of the government through the central bank,” he said.
Prof. Darku said the difference between the exchange rate applied when GoldBod purchased the gold and the rate used by the Bank of Ghana to record the dollar proceeds in cedis ultimately became an issue for the central bank to account for.
“So that rate being higher than the one that the central bank books, the dollar inflow in Cedis in its books is the central bank’s decision,” he said.